BREWING INDUSTRY AND THE FEDERAL GOVERNMENT 1862–1898
From the moment Southern troops fired on Fort Sumter the federal government required large sums of money to finance the Civil War. A Special Session of the Thirty-Seventh Congress (July–August 1861) attempted to meet this need by increasing certain customs duties, imposing a direct tax of $20 million on the States, and instituting an income tax.68
It soon became clear that these measures alone could not relieve the country’s financial burdens. Secretary of the Treasury Salmon P. Chase was hoping to raise $85 million and sent a bill to the Thirty-Seventh Congress. Congress, which reconvened on December 2, 1861, reviewed his request for a small increase in the income tax and excise taxes on manufactured goods. Distilled spirits, malt liquors, cotton, tobacco, carriages, yachts, billiard tables, gross receipts of railroads, steam boats and ferries, and playing cards all became taxable items. Signed by President Lincoln July 1, 1862, the measure became effective the following month.69 By the 1870s Congress had repealed most of the excise taxes;
68 U.S. Department, Internal Revenue Service, History of the Internal Revenue Service 1791-1929, prepared under the direction of the Commissioner of Internal Revenue (Washington, D.C.: U. S. Government Printing Office, 1930), 2.
69 Ibid., 3; Charles A. Jellison, Fessenden of Maine: Civil War Senator (Syracuse, N. Y: Syracuse University Press, 1962), 149; Leonard P. Curry, Blueprint for Modern America: Non-Military Legislation of the First Civil War Congress (Nashville: Vanderbilt University Press, 1968), 149–181; Bray Hammond, Sovereignty and an Empty Purse: Banks and Politics in the Civil War (Princeton: Princeton University Press, 1970), 52; Charles Estee, The Excise Tax Law (New York: Fitch, Estee, 1863), passim.